HomeMy WebLinkAbout20-94 RESOLUTION NO. 20-94
A RESOLUTION of the City Council of the City of Port Angeles,
Washington, accepting a bid for the sale of its Water and
Wastewater Utility Revenue and Refunding Bonds, 1994;
authorizing the interest rates and other terms of such bonds; and
authorizing the provision of municipal bond insurance and a
reserve fund surety bond with respect to such bonds, all as
provided by Ordinance No. 2843 of the City.
WHEREAS, by Ordinance No. 2843 (the "Bond Ordinance"), the City of Port Angeles,
Washington (the "City") has authorized issuance of its Water and Wastewater Utility Revenue and
Refunding Bonds, 1994, in the principal amount of $10,000,000 (the "Bonds"); and
WHEREAS, the Bond Ordinance provides that the Bonds shall be sold by public sale and
that the City Council of the City (the "Council") shall by resolution accept a bid and establish
certain terms of the Bonds on the date of such public sale; and
WHEREAS, the Council wishes to accept the bid for the Bonds that it has received from
Smith Barney Inc. (the "Underwriter") and to establish certain terms of the Bonds consistent with
such bid, as provided herein; and
WHEREAS, as authorized by Section 15.B of the Bond Ordinance, the City Council
wishes to provide for the purchase of Qualified Insurance from the Municipal Bond Investors
Assurance Corporation CMBIA'') to satisfy the Reserve Requirement with respect to the Bonds
on the terms and conditions set forth herein; and
WHEREAS, as authorized by Section 24 of the Bond Ordinance, the City Council wishes
to provide for the Bonds to be insured by MBIA under terms and conditions set forth herein;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Port
Angeles, Washington, as follows:
Section 1. Acceptance of Bid and Approval of Bond Terms. The bid of the
Underwriter for the Bonds, attached as Exhibit A hereto and incorporated herein by this
reference, is hereby in all respects accepted and approved, and the Bonds shall be issued and sold
to the Underwriter in accordance with the terms of such bid, the Bond Ordinance and this
resolution. The Bonds shall mature on November 1 in the years and amounts and bear interest at
the rates set forth below.
Maturity Year Princip~ Intere~
(November 1) Amount R~e
1995 $ 135,000 4.25%
1996 140,000 4.60
1997 150,000 4.85
1998 155,000 5.10
1999 160,000 5.30
2000 170,000 5.50
2001 180,000 5.65
2002 190,000 5.75
2003 200,000 5.85
2004 210,000 5.95
2005 220,000 6.05
2006 235,000 6.15
2007 250,000 6.25
2008 265,000 6.35
2009 280,000 6.45
2010 295,000 6.50
2011 315,000 6.55
2012 335,000 6.60
2013 355,000 6.65
2014 375,000 6.70
2019 2,280,000 6.70
2024 3,105,000 6.75
Section 2. Mandatory Redemption Provisions. The Bonds maturing on November 1
in the years 2019 and 2024 are hereby designated as Term Bonds. If not redeemed pursuant to
the optional redemption provisions set forth in Section 6(1) of the Bond Ordinance, the Bonds
maturing on November 1 in the years 2019 and 2024 shall be redeemed prior to maturity by lot
(or paid at maturity), on November 1 of the years and in the principal amounts as set forth below,
upon written notice as provided in Section 6(4) of the Bond Ordinance, by payment of the
principal amount thereof, together with the interest accrued thereon to the date fixed for
redemption.
2019 Term Bonds
Year Amount
2015 $400,000
2016 425,000
2017 455,000
2018 485,000
2019' 515,000
Maturity*
2 DOTOA2. DOtg ~4111
2024 Term Bonds
Year Amount
2020 $545,000
2021 580,000
2022 620,000
2023 660,000
2024* 700,000
Maturity*
Section 3. Execution and Delivery of the Bonds. The proper officials of the City are
hereby authorized and directed to do all things necessary or proper for the printing and execution
of the Bonds and their delivery to the Underwriter in accordance with the terms of the Bond
Ordinance and this resolution.
Section 4. Authorization of Qualified Insurance. In accordance with Section 15.B of
the Bond Ordinance, the Finance Director of the City is authorized to obtain from MBIA
Qualified Insurance in the form of a surety bond (the "MBIA Surety Bond") to fund the Reserve
Fund Requirement with respect to the Bonds. The City Manager is authorized to sign the Finance
Guaranty Agreement between the City and MBIA (the "Financial Guaranty Agreement") in
substantially the form filed with the City Clerk on the date of this meeting, subject to changes
approved by counsel to the City.
Section5. Authorization of Municipal Bond Insurance. In accordance with
Section 24 of the Bond Ordinance, the Finance Director of the City has obtained a written
commitment from MBIA that when the Bonds are delivered to the Underwriter MBIA will deliver
a policy of municipal bond insurance insuring the payment when due of the principal of and
interest on the Bonds (the "Municipal Bond Insurance Policy").
Section 6. Qualified Insurance and Municipal Bond Insurance Provisions. So long as
the Bonds are outstanding, the following provisions shall apply:
A. The following definitions set forth in Section 1 of the Bond Ordinance are
modified as follows (deletions are stricken and additions are underscored):
"Permitted Investments" means any of the following investments~ a-~y-i~est~,~
~e r,:~., a.,,~ if permitted under the laws of the State of Washington as amended
from time to time:
A. Direct obligations of the United States of America (including
obligations issued or held in book-entry form on the books of the
Department of the Treasury~ and CATS and TGRS} or obligations the
3 DO'I'OA2. DOC: 94/11/01
principal of and interest on which are unconditionally guaranteed by
the United States of America.
B. Bonds~ debentures~ notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States
of America (stripped securities are only permitted if they have been
striooed bv the a~encv itself):
1. U.S. Export-Import Bank: direct obligations or fully
guaranteed certificates of beneficial ownership~
2. Farmers Home Administration: certificates of beneficial
ownership~
3. Federal Financing Bank~
4. Federal Housing Administration Debentures~
5. General Services Administration: participation certificates~
6. Government National Mortgage Association (GNMA):
GNMA-guaranteed mortgage-backed bonds and GNMA-
guaranteed oass-throu~h obligations:
7. U.S. Maritime Administration: guaranteed Title XI financino:
and
8. U.S. Department of Housing and Urban Development: proiect
notes~ local authority bonds~ U.S. government-guaranteed new
communities debentures~ U.S. government-~uaranteed public
housing notes and bonds.
C. Bonds~ debentures~ notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S.
government agencies (stripped securities are only permitted if they
have been striooed bv the a~encv itself):
1. Federal Home Loan Bank System: senior debt obligations~
2. Federal Home Loan Mortga~,e Corporation: participation
certificates and senior debt obligations~
3. Federal National Mortgage Association: mortgage-backed
securities and senior debt obligations;
4. Student Loan Marketing Association: senior debt obligations;
5. Resolution Funding Corp. (REFCORP) obligations~ and
6. Farm Credit Systems: consolidated systemwide bonds and
notes.
D. Money market funds registered under the Federal Investment
Company Act of 1940~ whose shares are registered under the Federal
Securities Act of 1933~ and having a rating by S&P of AAAm-GI
A/LAm or AAm.
~' DOTOA2.DOC 94/11/01
E. Certificates of deposit secured at all times by collateral described in
(A) and/or (B) above. Such certificates must be issued by commercial
banks, savings and loan associations or mutual savings banks. The
collateral must be held by a third party and the bondholders must
have a perfected first security interest in the collateral.
F. Certificates of deposit, savings accounts, deposit accounts or money
market deposits that are fully insured by FDIC~ including BIF and
SAIK
G. Investment Agreements, including GIC's, acceptable to MBIA.
H. Commercial paper rated~ at the time of purchaser~ "Prime-l" by
Moody's and "A-l" or better by S&P.
I. Bonds or notes issued by any state or municipality rated by Moody*s
and S&P in one of the two highest ratine cateeories assigned by such
a~encies.
J. Federal funds or bankers acceptances with a maximum term of one
year of any bank that has an unsecured, uninsured and unguaranteed
obligation rating of "Prime-l" or "A3" or better by Moody's and "A"
or better by S&P.
K. Repurchase agreements providing for the transfer of securities from a
dealer bank or securities firm (seller/borrower) to a municipal entity
(buyer/lender)~ and the transfer of cash from a municipal entity to the
dealer bank or securities firm with an agreement that the dealer bank
or securities firm will repay the cash plus a yield to the municipal
entity in exchange for the securities at a specified date. Repurchase
Agreements must satisfy the following criteria or be approved by
MBIA:
1. Repos must be between the municipal entity and a dealer bank
or securities firm.
a. Primary dealers on the Federal Reserve reporting dealer
list that are rated A or better by S&P and Moody's~ or
b. Banks rated "A" or above by S&P and Moody's.
2. The written repo contract must include the following:
a. Securities that are acceptable for transfer are:
(1) Direct U.S. governments~ or
(2) Federal agencies backed by the full faith and
credit of the U.S. government (and FNMA &
FHLMC).
5 DOTOA2.DOO g~11~1
b. The term of the repo may be up to 30 days.
c. The collateral must be delivered to the municipal entity,
trustee (if trustee is not supplying the collateral) or
third party acting as agent for the trustee (if the trustee
is supplying the collateral) before or simultaneously
with payment (perfection by possession of certificated
securities).
d. The securities must be valued weekly~ marked-to-
market at current market price plus accrued interest.
The value of collateral must be equal to 104% of the
amount of cash transferred by the municipal entity to
the dealer bank or securities firm under the repo plus
accrued interest. If the value of securities held as
collateral slips below 104% of the value of the cash
transferred by municipality~ then additional cash and/or
acceptable securities must be transferred. If, however,
the securities used as collateral are FNMA or FHLMC,
then the value of collateral must equal 105%
3. A legal opinion must be delivered to the municipal entity to the
effect that the repo meets guidelines under state law for legal
investment of public funds.
L. Any Washington State-administered investment pool in which the
City is statutorily permitted or required to invest City funds.
"Qualified Insurance" means any unconditional municipal bond insurance policy or
surety bond issued by any insurance company licensed to conduct an insurance
business in any state of the United States or by a service corporation acting on
behalf of one or more such insurance companies, which insurance company or
service corporation is rated in oae~c4he-t~wo the highest rating categories by
Moody's Investors Service, Inc. or any other rating agency then maintaining a
rating on the Bonds, and if rated by A.M. Best & Company must also be rated
in the hiehest ratin~ cate~zorv by A.M. Best & Company, provided, that, as of
the time of issuance of such policy or surety bond, such insurance company or
companies maintain a policy owner's surplus in excess of $500,000,000.
B. The rate covenant set forth in Section 16.A(1) of the Bond Ordinance is modified
as follows (additions are underscored):
Gross Revenue will at all times be sufficient (a)io pay all Costs of
Maintenance and Operations and to pay all taxes, assessments or other
governmental charges lawfully imposed on the System or the revenue therefrom or
payments in lieu thereof and any and all other amounts that the City may now be
and hereafter become obligated to pay from Gross Revenue by law or contract,
including payments other than debt service required under the DOE Loan
6 ~o'ro~.r,oc g4/11/01
Agreement; and, together with Assessments actually collected, (b)to pay the
principal of and interest on all outstanding Parity Bonds as and when the same
become due and payable, to make all payments required to be made into the Bond
Fund to satisfy the Sinking Fund Requirement, to make all payments required to
be made under the Financial Guaranty Aereement, and to make when due all
payments required to be made into the Reserve Account.
C. The additional bonds test set forth in the first paragraph of Section 21.A(5) of the
Bond Ordinance is modified as follows (additions are underscored):
Prior to the delivery of any Future Parity Bonds, the City shall have on file
in the office of the City Clerk a certificate of a Professional Utility Consultant
showing: that the Net Revenue determined and adjusted as hereafter provided for
each calendar or fiscal year after the issuance of such Future Parity Bonds (the
"Adjusted Net Revenue") will equal at least 1.25 times the Average Annual Debt
Service (after deducting Assessments, allocated to the years in which they would
be received if the unpaid balance of each assessment roll were paid in the
remaining number of installments with interest on the declining balance at the times
and at the rate provided in the ordinance confirming the assessment roll) for each
such calendar or fiscal year for all Parity Bonds plus the Future Parity Bonds
proposed to be issued.
D. Before the Bonds may be defeased pursuant to Section 20 of the Bond Ordinance
or optionally redeemed pursuant to Section 6(1) of the Bond Ordinance, provision must be made
for the payment of all amounts owed to MBIA under the Financial Guaranty Agreement.
E. The City shall maintain adequate records, available for verification by MBIA, as to
the amount available to be drawn at any given time under the MBIA Surety Bond and as to the
amounts paid and owing to MBIA under the terms of the Financial Guaranty Agreement.
F. Payments under the Municipal Bond Insurance Policy shall be made, as follows;
provided, however, that the provisions of this subsection E shall be in effect only so long as the
Municipal Bond Insurance Policy remains in full force and effect:
1. In the event that, on the payment date on the Bonds, the City or the Bond
Registrar determines that there will not be sufficient money available in the Bond Fund to pay all
principal of and interest on the Bonds due on such payment date, the City or the Bond Registrar
shall immediately notify MBIA or its designee on the same Business Day by telephone or
telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency.
2. If the deficiency is made up in whole or in part, the Bond Registrar shall so notify
MBIA or its designee.
3. In addition, if the Bond Registrar has notice that any Bondholder has been required
to disgorge payments of principal or interest on a Bond to a trustee in Bankruptcy or creditors or
7 DOTOA2. DOC 94/11/01
others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes a voidable preference to such Bondholder within the meaning of any applicable
bankruptcy laws, then the Bond Registrar shall notify MBIA or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by registered or certified mail.
4. The Bond Registrar is hereby irrevocably designated, appointed, directed and
authorized to act for Bondholders as follows:
a. If and to the extent there is a deficiency in amounts required to pay interest
on the Bonds, the Bond Registrar shall (a) execute and deliver to State Street Bank and
Trust Company, N.A., or its successors under the Municipal Bond Insurance Policy (the
"Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an
instrument appointing MBIA as agent for such Bondholders in any legal proceeding
related to the payment of such interest and an assignment to MBIA of the claims for
interest to which such deficiency relates and which are paid by MBIA, (b)receive as
designee of the respective Bondholders (and not as Bond Registrar) in accordance with
the tenor of the Municipal Bond Insurance Policy payment from the Insurance Paying
Agent with respect to the claims for interest so assigned, and (c) disburse the same to such
respective Bondholders; and
b. If and to the extent of a deficiency in amounts required to pay principal of
the Bonds, the Bond Registrar shall (a) execute and deliver to the Insurance Paying Agent
in form satisfactory to the Insurance Paying Agent an instrument appointing MBIA as
agent for such Bondholder in any legal proceeding relating to the payment of such
principal and an assignment to MBIA of any of the Bonds surrendered to the Insurance
Paying Agent of so much of the principal amount thereof as has not previously been paid
or for which moneys are not held by the Bond Registrar and available for such payment
(but such assignment shall be delivered only if payment from the Insurance Paying Agent
is received), (b)receive as designee of the respective Bondholders (and not as Bond
Registrar) in accordance with the tenor of the Municipal Bond Insurance Policy payment
therefor from the Insurance Paying Agent, and (c) disburse the same to such Bondholders.
5. Payments with respect to claims for interest on and principal of Bonds disbursed
by the Bond Registrar from proceeds of the Municipal Bond Insurance Policy shall not be
considered to discharge the obligation of the City with respect to such Bonds, and MBIA shall
become the owner of such unpaid Bond and claims for the interest in accordance with the tenor of
the assignment made to it under the provisions of this subsection or otherwise.
6. Irrespective of whether any such assignment is executed and delivered, the City
and the Bond Registrar:
a. Recognize that to the extent that MBIA makes payments, directly or
indirectly (as by paying through the Bond Registrar), on account of principal of or interest
on the Bonds, MBIA will be subrogated to the rights of such Bondholders to receive the
8 DOTOAZ DOC 94/11/01
amount of such principal and interest from the City, with interest thereon as provided and
solely from the sources stated in the Bond Ordinance, this resolution and the Bonds; and
b. Will accordingly pay to MBIA the amount of such principal and interest
(including principal and interest recovered under subparagraph (ii) of the first paragraph of
the Municipal Bond Insurance Policy, which principal and interest shall be deemed past
due and not to have been paid), with interest thereon as provided in the Bond Ordinance,
this resolution and the Bonds, but only from the sources and in the manner provided
herein for the payment of principal and interest, and will otherwise treat MBIA as the
owner of such rights to the amount of such principal and interest.
7. In connection with the issuance of Future Parity Bonds, the City shall deliver to
MBIA a copy of the disclosure document, if any, circulated with respect to such bonds.
8. Copies of any amendments made to the documents executed in connection with
the issuance of the Bonds which are consented to by MBIA shall be sent to S&P.
9. MBIA shall receive notice of the resignation or removal of the Bond Registrar and
the appointment of successor thereto.
10. MBIA shall receive copies of all notices required to be delivered to Registered
Owners or to the Bond Registrar and such other documents as are identified in the commitment
for the Municipal Bond Insurance Policy issued by MBIA and accepted by the City. All notices
required to be given to MBIA hereunder shall be in writing and shall be sent by registered or
certified mail addressed to Municipal Bond Investors Assurance Corporation, 113 King Street,
Armonk, New York 10504 Attention: Surveillance.
Section 7. Ratification of Past Acts and Authorization of Future Acts. All actions and
proceedings heretofore taken by the officers, agents, attorneys and employees of the City in
connection with the issuance of the Bonds are hereby ratified, approved and confirmed. The
Council further authorizes and directs all proper officers, agents, attorneys and employees of the
City to carry out or cause to be carded out all Bonds of the City under the Bond Ordinance and
this resolution and to perform such other acts as they shall consider necessary or advisable in
connection with the printing, execution, and delivery of the Bonds.
Section 8. Severability. If any one or more of the covenants and agreements provided
in this resolution to be performed on the part of the City shall be declared by any court of
competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
agreements, shall be null and void and shall be deemed separable from the remaining covenants
and agreements in this resolution and shall in no way affect the validity of the other provisions of
this resolution or of any Bonds.
Section 9. Effective Date. This resolution shall take effect immediately upon its
adoption.
9 DOTOA2.DOC 94/11/01
ADOPTED by the City Council of the City of Port Angeles, Washington, at a regular
meeting thereof this 1 st day of November, 1994.
CITY OF PORT ANGELES,
WASHINGTON
/
Mayor(
ATTEST:
Cit~y ~lerk q q
] 0 DOTOA2.DOC 94/11/01
EXHIBIT A
BID FORM ~
$10,000,000
CITY OF PORT ANGELES, WASHINGTON
WATER AND WASTEWATER UTELH~ REVENUE AND REFUNDING BONDS, 1994
City of Port Angeles
cdo Preston Gates & Ellis
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104
Ladies and Gentlemen:
For the $10,000,000 par value of City of Port Angeles, Washington, Water and Wastewater Utility Revenue and
Refunding Bonds, 1994, dated November 1, 1994 (the "Bonds"), maturing serially or subject to mandatory
redemption on November 1 of each of the years 1995 through 2024 in the amounts shown below, callable on and-
after November 1, 2004, at a price of 101% of par, declining to par on November 1, 2006, plus accrued interest to
the date fixed for redemption, and with interest payable on May 1, 1995, and semiannually thereafter on the first
days of November and May from the date of issue at the rate or rates specified herein,
We Will Pay $
for $10,000,000 of par value of the Bonds, plus accrued interest from November 1, 1994, to the maturity dates of
the Bonds, to us.
The schedule of maturities and the interest rates, upon which this bid is based, with the interest computed from
November I, 1994, to the maturity dates of the Bonds, is as follows:
Years Principal Interest Years Principal Interest
(November 1) Amounts* Rate (November 1) Amounts* Rate
1995 $135,000 z~, ~._y'- 2010 $ 295;000
1996 140,000 ~, ~ o 2011 315,000
1997 150,000 z~. g 3'~ 2012 335,000 &, ~ o
1998 155,000 ~/cz> 2013 355,000
1999 160,000 5'. ~ c> 2014 375,000
2000 170,000 ~. ~ 2015 400,000 Fa
200~ 180700 .~. 6r~- 2016 4z5,000
2002 190,000 ~, :~F-~ 2017 455,000
2003 200,000 ~, g.C'- 2018 485;000 6.
2004 210,000 ~ ~ ~ 2019 515,000
2005 220.000 ~, o S' 2020 545.000 6. '~-
2006 235.000. 6, l ~ 2021 580,000
2007 250,000 6, ,2. ~' 2022 620,000
2008 265,000 ~,. 3.z~- 2023 660,000
2009 280,000 ~,.z~X' ' 2024 700,000 &. ~I"-
* These mounts shall be serial maturities unless specified below to be aggregated into Term Bond maturities, in
which case the amounts shall be retired by mandatory redemption.
-' We hereby spex:ia~y that the following Bonds be aggregated into Term Bonds maturing on November 1 in the
'. following amounts (leave blank if no Term Bonds are specifiC):
Years Maturity
Aggregated Year Amount
through
through
This bid is submitted in accordance with and subject to all 'provisions con~ioed in the Official Notice of Bond Sale
of these Bonds.
Our calculation, but not constituting any part of the foregoing bid,
We enclose herewith (cashiers) (certified) check or Surety Bond in the 'sum of $100,000, payable to the City of
Port Angeles (the "City"), which check/Surety Bond is to be returned to us if this bid is not accepted: If this bid is
accepted, said check shall be deposited bythe Treasurer of the City and applied on the purchase price of the Bonds
when the same are delivered and paid for under the terms of this bid, or is to be retained as and £or liquidated
dam.ages in case we fail to accept the Bonds when ready for deliver/or fail to complete payment therefor in
accordance with the temm of this hick
~es~-xf~ly submitted t~s
Good faith check returned and receipt thereof acknowledged.
Type or printed name:
(Signed)
For
'-'~- DOT09Z. DOC 94~10/
CERTIFICATE OF CITY CLERK
I DO HEREBY CERTIFY that I am the duly chosen, qualified and acting Clerk of the
City of Port Angeles, Washington (the "City"), and keeper of the records of the City Council; and
I HEREBY CERTIFY:
1. That the attached resolution is a true and correct copy of Resolution No.
20-94 of the City Council (the "Resolution"), as adopted at a regular meeting of the City Council
held on the 1st day of November, 1994 and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance
with law, and to the extent required by law, due and proper notice of such meeting was given;
that a quorum was present throughout the meeting and a legally sufficient number of members of
the City Council voted in the proper manner for the passage of the Resolution; that all other
requirements and proceedings incident to the proper passage of the Resolution have been duly
fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City this 1st day of November, 1994.
q ~ity Clerl[